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Jan 29, 2012 at 12:01 AMJan 29, 2012 at 5:00 AM

Quakertown’s plan to double water rates for its 900 Richland customers is not a slam dunk.

Rather than automatically granting the borough’s petition, the state’s Public Utility Commission voted Friday to investigate whether the proposed rate increase is reasonable. The investigation could take up to seven months.

An investigation was warranted because citizen complaints about the proposed increase have already been filed with the PUC, said Erica Dominick, spokeswoman for the commission.

Quakertown officials say the increase is necessary to meet higher expenses and help pay for several infrastructure improvements, including an approximately $2 million arsenic remediation project for three wells located in Richland, said Scott McElree, borough manager.

“Our goal is to look to see how we can receive the proper revenues to support the service that we provide,” he said. “The PUC has a process that we know has to be followed; we’re doing that, and we’re prepared to present all the proper data.”

Quakertown has not raised rates for its Richland customers since 2004.

Quakertown also provides water to about 6,000 customers within the borough, but the PUC only has jurisdiction over the rates of customers outside the borough limits.

Quakertown added a debt service fee in 2010 and raised water rates by 18 percent this year for its borough customers. The new rates, about $8 per month to the average residential homeowner’s bill, should appear on bills in February.

The proposed increase for Richland customers would help bring them closer in line to what borough customers are paying, McElree said.

The average Quakertown resident — using 3,000 gallons of water a month — pays about $160 a year for water.

In addition, those customers pay a debt service fee that ranges from $192 to $2,400 per year, depending on how many gallons of water they use.

The average Richland customer who uses 3,000 gallons a month is paying $162 a year for water, but does not have to pay the debt service fee. Quakertown’s proposed rate hike would increase the average annual bill in Richland to about $325 a year, just over double the current rate.

According to the PUC, Quakertown’s proposed rate increase would add $278,854 in revenues for the borough, an increase of 87.9 percent.

Over the next seven months, PUC officials will follow their usual process to determine “the lowest reasonable rate for consumers while maintaining the financial stability of utilities,” according to the commission’s website.

An administrative law judge for the PUC could end up approving the borough’s approved increase or setting a rate hike that is lower than requested, Dominick said.

The PUC will be holding formal public hearings on the rate proposal, with consumers allowed to gain party status by filling out a complaint form.

Dates for those hearings have not yet been determined, but will be announced soon, Dominck said.

Theresa Hegel: 215-538-6381;

email: thegel@phillyburbs.com;

Twitter: @theresahegel

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